Correlation Between Monitronics International and Federal Home
Can any of the company-specific risk be diversified away by investing in both Monitronics International and Federal Home at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Monitronics International and Federal Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Monitronics International and Federal Home Loan, you can compare the effects of market volatilities on Monitronics International and Federal Home and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Monitronics International with a short position of Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monitronics International and Federal Home.
Diversification Opportunities for Monitronics International and Federal Home
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Monitronics and Federal is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Monitronics International and Federal Home Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home Loan and Monitronics International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Monitronics International are associated (or correlated) with Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home Loan has no effect on the direction of Monitronics International i.e., Monitronics International and Federal Home go up and down completely randomly.
Pair Corralation between Monitronics International and Federal Home
If you would invest 0.01 in Monitronics International on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Monitronics International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Monitronics International vs. Federal Home Loan
Performance |
| Timeline |
| Monitronics International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Federal Home Loan |
Monitronics International and Federal Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Monitronics International and Federal Home
The main advantage of trading using opposite Monitronics International and Federal Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monitronics International position performs unexpectedly, Federal Home can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Federal Home will offset losses from the drop in Federal Home's long position.| Monitronics International vs. Paysafe | Monitronics International vs. Nok Airlines Public | Monitronics International vs. Global Crossing Airlines | Monitronics International vs. Hawaiian Holdings |
| Federal Home vs. Federal National Mortgage | Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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